US embassy cable - 05MADRID1924

C O N F I D E N T I A L MADRID 001924 
 
SIPDIS 
 
FOR NP/CBM, EUR/WE AND NEA/MAG 
 
E.O. 12958: DECL: 05/19/2015 
TAGS: PARM, PREL, PTER, ETTC, SP, CBW 
SUBJECT: SPANISH FIRM SEEKS BUSINESS WITH LIBYA 
 
Classified By: Political Counselor Kathleen M. Fitzpatrick, 
reasons 1.4(b), (d) and (h). 
 
1.  (C) This is an action request.  Please see paragraph 4. 
 
2.  (C) On May 17, Javier Hergueta, the Foreign Ministry's 
deputy director general for bilateral economic relations with 
Europe and the OECD countries, requested a meeting with 
poloff.  Hergueta explained that a Spanish firm, Espindesa 
(part of the Tecnicas Unidas conglomerate), had asked the 
Foreign Ministry to act as an "informal and discreet" 
interlocutor between the company and the US government. 
Espindesa, according to Hergueta, had signed a contract with 
the Libyan government in 1999 to build a USD 8.5 million 
factory to make nitric acid in Libya.  After September 11 and 
before work on the factory began in earnest, the Spanish 
government halted the project and it has been frozen ever 
since. 
 
3.  (C) Espindesa asked the Foreign Ministry to approach the 
US government on its behalf because the Libyan government 
(the "General Secretariat of Procurement") has recently asked 
Espindesa to move forward with the factory project.  Hergueta 
said that Espindesa does not want to trigger US sanctions or 
otherwise draw the US' ire by continuing with the project, 
and requested that Foreign Ministry attempt to find out what 
the US reaction to the project would be.  Hergueta told us he 
asked for the meeting with poloff, rather than sending a 
diplomatic note or other formal communication, to make the 
inquiry as discreetly as possible. 
 
4.  (C) Action request:  Embassy seeks Department's guidance 
on how to respond to the Foreign Ministry's inquiry. 
NEALON